Reference no: EM133177997

Questions -

Q1. The accounts below appeared in the December 31, 2021 trial balance Share Capital, P15 par, 20,000; shares P 270,000 authorized 18,000; shares issued Subscription Receivable 17,000; Subscribed Share Capital 27,000; Retained Earnings 200,000; Share Premium 95,000; Treasury Shares, 1000 shares, at cost 25,000. Determine the number of outstanding shares?

a. 19,000

b. 18,000

c. 17,000

d. 2,000

Q2. At its date of incorporation, Sandy Inc. issued 100,000 shares of its P10 par common stock at P11 per share. During the current year, Sandy Inc. acquired 20,000 shares of its common stock at a price of P16 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of P12 per share. There have been no other issuances or acquisitions of its own common stock. What effect does the reissuance of the stock have on retained earnings and premium on capital respectively?

a. No effect; No effect

b. Decrease; No effect

c. Decrease; Decrease

d. No effect; Decrease